Front Matter Page
INTERNATIONAL MONETARY FUND
The Fund’s Support of Low-Income Member Countries: Considerations on Instruments and Financing
Prepared by the Finance and Policy Development and Review Departments
(In consultation with other departments)
Approved by Eduard Brau and Mark Allen
February 24, 2004
Contents
Executive Summary
I. Introduction
II. General Considerations
A. Rationale for the Fund’s Future Concessional Financing
B. Nature of the Fund’s Support for Low-Income Members
III. Review of the Fund’s Concessional Financing
A. Funding Structure
B. Lending Terms
IV. Strengthening the Fund’s Support of Low-Income Members
A. Making More Efficient Use of PRGF Financing for Members with Continuing Balance of Payments Needs
Access Norms
PRGF/EFF Blend Arrangements
B. Support of Members with Limited Balance of Payments Need
Low-access PRGF Arrangements
Precautionary PRGF Arrangements
Enhanced Monitoring Policy
Post-Program Monitoring
C. Tailoring Fund Policies for Emergency Post-Conflict Assistance
D. Addressing Shocks
Principles for PRGF Augmentation
Use of Other Facilities by PRGF-eligible Members
V. Resource Requirements for the Continuation of PRGF Lending
A. Short-Term Prospects (2004–2005)
B. Medium-Term Prospects (2006–2010)
C. Beyond 2010
VI. Possible Sources of Financing
A. Financing Solely from the PRGF Reserve Account
Self-Sustained PRGF
Grants
Sun-Setting PRGF
B. Self-Sustained PRGF Supplemented with Additional Bilateral Loans
C. Subsidizing GRA Financing
D. Conclusion
VII. Issues for Discussion
Text Tables
1. Terms of Fund Lending Facilities and Policies
2. Average Access under PRGF Arrangements
3. Number of Successive PRGF Arrangements by Individual Member
4. PRGF-Eligible Countries–Reserve-Import Coverage
5. Post-HIPC Cases–Access under New PRGF Arrangements
6. Summary of Financing Requirements and Options
7. Sensitivity of Self-Sustained PRGF to Interest Rates and Reserve Account Coverage
8. Contributors of Loan Resources to the PRGF Trust since Inception in 1987
Text Figures
1. PRGF-Eligible Countries—GRA Purchases and Concessional Loan Disbursements
2. Loan Commitments under SAF and ESAF/PRGF
Text Boxes
1. Evolution of the Fund’s Concessional Assistance
2. The Reserve Account of the PRGF Trust, Special Disbursement Account (SDA), and Self-Sustained PRGF
3. Need as a Condition for the Use of PRGF Resources
4. Criteria for Blended PRGF/GRA Access
5. PRGF/EFF Blends—Potential Coverage of Proposed Guidelines
6. Emergency Post-Conflict Assistance—History and Current Policy
7. Principles for PRGF Augmentation
8. Review of the Compensatory Financing Facility (CFF)
9. Exceptional Financing for Protracted Arrears Cases
10. Reimbursement of Administrative Expenses Associated with Concessional Lending Operations
Annex
1. The Enhanced Monitoring Policy (EMP)